In September 2010 Mexico registered 33 million people with Internet access; this represents a more than 20% growth compared to the same period in 2009. According to the telecom regulator, Cofetel, and the National Institute of Statistics and Geography (INEGI), 67% of Internet users are between 12 and 34 years old. Today Mexico shares a 50%-50% gender split between men and women that use PCs/ Internet. Regarding online purchases, approximately 1.63 million people made a purchase or a payment online.

In the recent census, INEGI reported over 112 million people in Mexico and 25 million households. Today there are an estimated 6 million Internet connections, reaching approximately 25% of the population. Much of the growth in Internet penetration will be from Cable TV Triple Play Service, given that over 40% of households in Mexico have access to cable.

According to Iván Marchant, Country Manager for comScore México …”The outlook for Internet in Mexico continues to prosper as one of the fastest growing markets worldwide…” Today, the Microsoft portal has over 16.2 million users, while Google has over 15.2 million users, and with a 200% growth between 2009 and 2010, Facebook now reaches 11.6 million users.

Today, we can safely mention that Dial Up service is basically extinct in Mexico. All communications companies offer broadband Internet access and cost is differentiated by the capacity of broadband. The most common service is a 1Mb connection but 2 Mb is becoming standard. There are other residential packages that offer up to a 5 Mb connection.

All communications companies offer standard communications and Internet services. Fixed line companies like Telmex, Alestra, Axtel, and Maxcom seek to bundle Dual or Triple Play services, but in the case of Maxcom, it offer Quadruple Play services. However, the biggest gainers in the Triple Play offer have been Cable TV (CATV) fixed operators. They have grown in Pay-TV services and Internet connection subscribers. The biggest players in the CATV industry are Megacable, Cablemás, and Cablevisión. Additionally, wireless operators are compensating the slow voice growth with smartphones, data services, and applications. More and more people are trading in their cell phones for smartphones and other devices that can have wireless connectivity, such as tablets, netbooks, and modems.

Best Products/Services and Opportunities

For U.S. companies seeking to enter Mexico through the offer of software, hardware, applications, or other products or services to operators, the main companies in the telecom market in Mexico are:

Wireless Telcel, Movistar, Nextel, Iusacell / Unefon

Fixed Telmex, Alestra, Axtel, Maxcom

Cable TV Megacable, Cablemás, Cablevisión

For the above-mentioned carriers, their demand for services will grow in different areas such as:

1. BUSINESS INTELLIGENCE SOFTWARE

2. CATV NETWORK APPS

3. CONSULTING & IT/SYSTEMS INTEGRATION

4. INFORMATION SECURITY SERVICES

5. LEASED INFRASTRUCTURE (NOCs, SOCs)

6. MAINTENANCE & SERVICE

7. TAILORED SOFTWARE APPLICATIONS FOR VERTICAL MARKETS

8. TRAINING (bundled with an overall solution).

9. WIRELESS APPS (mainly focused on mobile broadband, such as TV).

The Mexican user market is quickly moving to service contracts as the predominant business model. Software, Infrastructure and Platform as a Service (SaaS, IaaS, and PaaS) will provide the best opportunities. Also, the general technology trends are present in Mexico where new opportunities will arise. These are:

There various opportunities in the telecom sector. Carriers are increasing their spectrum capacity and targeting 3G and LTE (4G) networks, where the main players are Telmex, Axtel, Alestra, Maxcom, América Móvil, Iusacell, Nextel, and Telefónica. These opportunities are usually taken directly by the telecom equipment OEM (Nokia-Siemens, NEC, Cisco, Ericsson, Huawei, Alcatel-Lucent, ZTE, and Juniper Networks. However, inventory management of parts and 2nd tier equipment can fulfill specific requirements of carriers.

Also, cloud computing solutions, mobile applications, equipment maintenance, and services are good prospective opportunities for U.S. companies who wish to enter Mexico through a local strategic partner.

Finally, data center solutions (hardware, software, and services), including green solutions, will provide good opportunities in the next few years.